You may be wondering what triggered the community buzz swirling around Stacks lately. Why has Stacks’ native STX token surged by an astronomical 63% on a seven-day basis? Is this an indication that altcoin season is starting or is there another explanation behind Stacks’ sudden newfound fame?
Stacks’ surge in popularity may be better explained by its recent launch of an NFT marketplace, which has served to instill a newfound interest in Bitcoin NFTs. Unlike other blockchains, Stacks is a blockchain ecosystem that is unique in that it possesses both Ethereum-like and Bitcoin-like qualities.
Combining Ethereum and Bitcoin functionality through Stacks
Stacks is an open-source network that uniquely couples Ethereum’s smart contract functionality with Bitcoin’s security. It is one of a kind as Bitcoin’s network does not typically enable smart contract interoperability. Stacks also brings added value to investors, providing STX holders with the opportunity of earning Bitcoin rewards when staking.
With Stacks, users can build decentralized apps on the blockchain using Bitcoin-based logic. This means that projects are as secure as the Bitcoin blockchain and they can be built one on top of the other. Once a transaction is settled in Bitcoin on the ecosystem, it is irreversible. On Stacks, all transactions are settled in Bitcoin.
Created in 2013 and formerly branded as Blockstacks, Stacks was designed by founder Muneeb Ali to address Bitcoin’s scalability issues through the use of a proof-of-transfer protocol, a new mining mechanism that enables DeFi apps and smart contracts to run on Bitcoin blockchain. With Stacks, transactions are also settled and stacked in Bitcoin.
Users can therefore now run smart contracts on Bitcoin through Stacks as an added layer, a feature that is innovative even in the fast-paced digital realm.
NFTs on Stacks blockchain
Recently, with the announcement that Bitcoin NFTs will be hosted on Stacks’ newly launched NFT marketplace, the ecosystem’s native STX token blew up in value, gaining thirteen places in the crypto market and increasing by over 63%. With the current crypto trend gravitating towards NFTs and Stacks’ anticipated NFT marketplace, its token seems set to continue surging in value.
Although Bitcoin NFTs sound like a foreign concept, they have actually been around for quite some time. Bitcoin NFTs are simply digital collectibles that utilize the cryptocurrency’s blockchain technology to secure their value and ownership.
The reason why Stacks has gained significant merit is due to its ability to uniquely combine the functionality of both Ethereum and Bitcoin, the two leading digital assets by market capitalization. Both Ethereum and Bitcoin possess great value.
However, experts have long pinpointed the benefits and downsides of each. While the majority of DeFi protocols run on Ethereum, the network’s rising gas fees have caused many to consider mobilizing their projects to other blockchains, where transaction costs will be lower and the output will be just as efficient.
As for Bitcoin, it is known for possessing great underlying infrastructural security. However, at the base layer, it sadly lacks the scalability Ethereum possesses. With Stacks, developers and innovators can combine the smart contract functionality of Ethereum as well as the security of Bitcoin to run more efficient and user-friendly applications.
What is Taproot?
Additionally, as smart contracts have been revolutionizing the financial infrastructure and are at the base of innovation in the crypto industry, Bitcoin’s network will soon undergo a major upgrade that is set to expand the scope of smart contracts. Taproot, the long-awaited upgrade of the Bitcoin network, will serve to scale the network’s smart contract functionality. Not only that, but Taproot will also increase the level of security on the Bitcoin Network, with enhanced performance, privacy, and usability. It supersedes the previously established privacy measures on the Bitcoin Network with two cryptographic strategies that are a step-up of the Merkle tree.
NFTs, smart contracts, Stacks – none of these concepts are foreign in the crypto space. Rather, they have been dormant. Yet, they are only now being recognized by institutional and retail investors, as their value has grown thanks to their increased use cases over time.